The Australian government said it ordered the sale of another eight residential properties bought in breach of foreign ownership laws, in a response to concerns that offshore buyers were driving up house prices.

Australian capital city homes are considered among the most overpriced in the world, and the Federal Government announced penalties for foreigners who breach existing rules that restrict them to buying new homes only.

Treasurer Scott Morrison said on Monday the forced sale of eight properties takes to 27 the total number of homes the government has declared were bought illegally by foreigners, mostly Chinese nationals.

Since the foreign ownership crackdown began last year, the government said it had investigated more than 1,300 property sales and had another 800 under investigation.